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d's Dairy orl In W du e st h r t y g W n i e e v Since 1876 k r e l y S Outshred Your Competition CHEESE REPORTER www.URSCHEL.com Vol. 145, No.1 • Friday, June 19, 2020 • Madison, Wisconsin US Dairy Groups Criticize Canada’s Milk Production Fell 1% In May; Output Allocation Of Tariff-Rate Quotas Declined 1.5% In CA, Canadian Dairy Processors Praise Decision To On Monday, the Canadian gov- 3.1% In Wisconsin ernment issued notices to import- Washington—US milk produc- Allocate Majority Of TRQs To Processors ers that set out the policies and tion in the 24 reporting states practices pertaining to the admin- during May totaled 17.96 billion Arlington, VA, and Ottawa, Whey powder is the exception, istration of Canada’s TRQs under pounds, down 1 percent from May the report said: its TRQ would rise Ontario—Two US dairy organi- the CUSMA. 2019, USDA’s National Agricul- to 4,303 metric tons by year 10, zations this week criticized the There are two TRQs for cheese, tural Statistics Service (NASS) after which it would be eliminated. Canadian government’s alloca- one for cheese for industrial use, reported Thursday. Under the USMCA, which is tion of its dairy tariff-rate quotas which applies to bulk shipments NASS revised its April milk known in Canada as the Canada- (TRQs) under the US-Mexico- for further food processing; the production estimate down by 47 United States-Mexico Agreement Canada Agreement (USMCA). other, cheese of all types, is for any million pounds, so April milk out- (CUSMA), Canada will adminis- Under the USMCA, which will use. put was up 1.3 percent from April ter the agreed-upon dairy TRQs enter force on July 1, 2020, Can- The access quantity for each of 2019, rather than up 1.6 percent as through its import licensing sys- ada will provide new TRQs exclu- those categories is 521,000 kilo- originally estimated. tem for each quota year. Quotas sively for the US for 14 categories grams for the period July 1 to Dec. Production per cow in the 24 will be allocated to eligible appli- of US dairy products, which cover 31, 2020. reporting states averaged 2,031 cants active in Canada’s food and 51 tariff lines as classified in the For the cheeses of all types cat- pounds for May, 32 pounds below agriculture sectors. The quota year Harmonized Tariff System (HTS), egory, 85 percent is allocated to May 2019. for milk, cream, skim milk powder, according to a recent report from processors on a market share basis The number of milk cows on butter, milk powder, and whey is the Congressional Research Ser- based on the kilograms of cheeses farms in the 24 reporting states was Aug. 1 to July 31. The other dairy vice (CRS). of all types manufactured by the 8.84 million head, 50,000 head products are to be administered on The TRQ amounts would be processor during the reference more than May 2019 but 12,000 a calendar year basis. established for year one and dou- period, and 15 percent is allocated head less than April 2020. According to the US Dairy bled in year two and would then to distributors on an equal share For the entire US, May milk Export Council (USDEC) and the increase by 50 percent, 33 percent, basis. production totaled 18.84 billion National Milk Producers Federa- 25 percent, and 20 percent in years For the industrial cheese tariff- pounds, down 1.1 percent from tion (NMPF), Canada will distrib- three through six, the CRS report rate quota, 80 percent is allocated May 2019. ute the TRQs in such a way as to explained. After year six, the to processors on a market share Production per cow averaged discourage high-value food service quantities of each category would basis based on the kilograms of 2,011 pounds for May, 31 pounds or retail products from entering increase at a compound growth industrial cheeses manufactured for below May 2019. The number of the market. Most of the TRQs are rate of 1 percent for the subsequent use as an ingredient in the output milk cows on farms in the United given to competitors who have no 13 years. After year 19, the quotas States in May was 9.37 million incentive to import products. would be fixed at the year-19 level. • See Canada’s TRQs, p. 11 head, 37,000 head more than May 2019, but 11,000 head less than Less Than 2 Billion Some USDA Food Box Contracts April 2020. NASS noted that its milk pro- Pounds Of Milk Extended For July 1-Aug. 30 Period duction and milk per cow esti- mates include dumped milk. Washington—US Secretary of on their demonstrated abilities Pooled On California California’s May milk produc- Agriculture Sonny Perdue on to perform or at the vendor’s tion totaled 3.5 billion pounds, Order In May; Class Wednesday announced that the request, USDA explained. III Use Was 2.8% US Department of Agriculture These extensions continue • See Less Milk In May, p. 6 (USDA) will extend the con- to require audits to ensure food Folsom, CA—The volume of tracts of select vendors from the safety plans are being followed, Change In Milk Per Cow milk pooled on the California fed- May 2020 vs May 2019 first round of the Farmers to Fam- 100 percent US grown and raised in pounds eral milk marketing order in May ilies Food Box Program. food is being procured and deliv- totaled 1.9 billion pounds, down USDA is exercising this option ered, and food products meet all 25 10 10 about 80 million pounds from to extend contracts for current of USDA’s standards. April, according to the statisti- distributors for the next perfor- USDA said it chose not to 0 cal uniform price announcement mance period, July 1 through extend some vendors’ contracts -25 -15 released late last week by the mar- -20 Aug. 30, for up to $1.16 billion either in part because of con- -25 -25 ket administrator’s office. -50 in food. cerns brought up during audits -45 -50 That marked the second month The decision to extend cur- or for performance challenges. in a row, and the eighth time in -75 rent contractors was determined Also, some contracts were not -75 the last 10 months, that less than 2 based on their performance since extended at the vendors’ request. -100 billion pounds of milk was pooled May 15, which is when the In addition, USDA said it will on the California federal order. delivery period for the current begin new contracts with a few -125 The statistical uniform price for contract period started. Some vendors whose offers were not -150 the California order in May was vendors were extended without previously accepted due to tech- $11.95 per hundredweight, down any adjustment to their delivery nical errors in their proposals. -175 99 cents from April. Minimum amounts, while others’ amounts -185 -200 • See CA Federal Order, p. 8 or locations were adjusted based • See Food Box Contracts, p. 10 CA WI ID NY TX MI PA MN NM SD Page 2 CHEESE REPORTER June 19, 2020 Past Issues Read this week’s issue EDITORIAL COMMENT or past issues of The controversy over this pro- Cheese Reporter on your mobile phone or gram started after USDA, on tablet by scanning this May 8, approved $1.2 billion in QR code. DICK GROVES contracts under the Farmers to Cheese Reporter Publishing Co. Inc. ©2020 Families Food Box Program. Con- 2810 Crossroads Drive, Suite 3000 tracts were awarded to somewhere Publisher / Editor Madison, WI 53718-7972 around 200 companies located Cheese Reporter (608) 246-8430 • Fax (608) 246-8431 around the US. http://www.cheesereporter.com e: [email protected] DICK GROVES tw: @cheesereporter Publisher/Editor e-mail: [email protected] 608-316-3791 MOIRA CROWLEY Auditors, Investigators Likely To Be Busy For Foreseeable Future Specialty Cheese Editor While the ongoing coronavirus This promises to be a program prioritize agricultural and energy e-mail: [email protected] 608-316-3793 pandemic continues to reshape with ample opportunities for gov- markets, which have witnessed sig- ernment oversight, since just the nificant volatility in the wake of KEVIN THOME pretty much every industry on the Advertising & Marketing Director planet (and generally not for the awarding of initial contracts gen- the coronavirus pandemic.” e-mail: [email protected] better), there’s at least one industry erated some questions. The initial That’s certainly not news to the 608-316-3792 that appears to have a very bright contract period runs through the dairy industry which, as noted in BETTY MERKES future, at least for the next year or end of this month, and USDA has this space just last week, has expe- Classifieds/Circulation Manager e-mail: [email protected] two: the auditing and investigating elected to extend the period of rienced unprecedented cheese 608-316-3790 industry. some contracts, depending on pro- price volatility over the past three REGULAR CONTRIBUTORS: This isn’t really an “industry” gram success and available remain- months, with the CME cash mar- Jen Pino-Gallagher, Bob Cropp, Brandis as such, but those involved in ing funds, up to $3 billion. ket price for 40-pound Cheddar Wasvick, Dan Strongin, John Umhoefer auditing government spending Less than two weeks after blocks varying from a low of $1.00 You can e-mail our contributors at: announcing contracts under per pound back in mid-April to a [email protected] and investigating industry behav- ior during the pandemic will be the Food Box Program, USDA record high of $2.5850 per pound The Cheese Reporter is the official mighty busy trying to figure out if announced details of the Coro- last week.
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